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India

Electricity Amendment Bill Opposed Over ‘Privatisation’ Heads To Standing Committee

The Opposition, including Congress, Trinamool Congress, CPI (M) and DMK, has opposed the bill, citing it would dilute the federal spirit and permit indiscriminate privatisation of the power sector.

power electricity
The power minister said that India is the world’s largest single frequency electricity grid. (File Photo)

The Electricity Amendment Bill, 2022, introduced in the Lok Sabha on August 8, will be sent to the parliamentary standing committee on energy – headed by MP Rajiv Ranjan Singh of the Janata Dal (United). The Opposition, including Congress, Trinamool Congress, CPI (M) and DMK, has opposed the bill, citing it would dilute the federal spirit and permit indiscriminate privatisation of the power sector, and work against farmers in states like Punjab which have given them free power for agricultural purposes.

Congress MP Manish Tewari focused his argument on the point that it would allow multiple private companies to provide electricity in the same area, a provision that could lead to “privatisation of profits and nationalisation of losses”.

Interestingly, Adani Transmission in its integrated annual report of 2021-22 points to an “impending reform in the country’s electricity sector” which it said is expected to privatise public utilities, giving “an unprecedented opportunity”. It said “Adani Transmission Limited is at an inflection point in its existence.

The transmission side of its business faces a multi-year growth journey on account of India’s growing need to connect new renewable energy generation sites with the national power grid. The distribution side of its business faces impending reform in the country’s electricity sector. This reform is expected to privatise public utilities, an unprecedented opportunity. The combination of these two realities has opened up a multiyear growth runway for India’s largest private sector transmission and distribution company.”

One of the amendments in the Bill is to section 14 of the Act where the words “through their own distribution system” shall be omitted and substituted with “to distribute electricity as a distribution licensee in an area of supply in accordance with such criteria as may be prescribed by the Central Government”.

And section 42 which would give non-discriminatory open access to other distribution licensees on payment of wheeling charges.

These would allow DISCOMS to use power distribution network of other licensees. The bill also provides for insertion of section 60A aimed at enabling management of power purchase and cross-subsidy in case of multiple distribution licensees in the same area of supply.

Punjab Chief Minister Bhagwant Mann in his objections to the Electricity (Amendment) Bill said it was an attack on the Constitutional rights of the States, calling it another attempt by the centre to “undermine” States authority. He said the Centre should not consider the States as puppets.

“Free power supply is also being provided to domestic consumers and if the Centre is amending the Electricity Act as per its own conditions, the farmers and other sections will get a big blow as States such as Punjab will not be able to continue such pro-people initiatives,” he said. Mann, a leader from Aam Aadmi Party (AAP) said the Centre should “desist from playing with fire”.

Importantly, the year-long farmer protests against three new farm laws – which were eventually withdrawn – had come to an end after consensus between the farmer union Samyukta Kisan Morcha (SKM) and the Centre. One of the points was that the government would discuss this very Bill with farmers before it is tabled in Parliament.